Saturday, December 21, 2013

The real part of real estate - By Robert Tooker

My father built a small home out of red bricks on a lake in Michigan. His best friend and neighbor, a skilled mason, used leftover bricks to build a backyard barbeque with a tall chimney, a gift in celebration of my birth. I have such wonderful memories of that house, that beautiful lake, and the idyllic neighborhood I grew up in. I’m still overcome with emotions every time I see that nearly 60-year-old barbeque standing like new, in defiance of time. Even my footprints imbedded in a freshly poured cement seawall when I was two years old are still there to remind me of those magical days. We never forget our childhood home.
Earlier this year, my clients, the nicest people you’d ever want to meet, were looking for a decent ranch in their price range in several nearby towns. These homes had all sold quickly just before my clients began looking. After months of keeping a close eye on the market, hope slowly fading, they asked me to show them a foreclosure property they happened to notice in a quaint, far away town, admitting from the outset that it was mostly out of curiosity. 

Expecting the worst, we were pleasantly surprised by its condition. “This isn’t in bad shape at all!” the astonished husband said. And after a long pause, “My father had this house built. This was my childhood home.” “I can’t believe it. This was my bedroom. My brother slept over here. These are the same cabinets,” and so on. Pointing to some coat hooks – nails in a board along the basement stairs – “I hammered these in 40 years ago.” And then there were stories about the neighbors. He was sure several of them still lived there. “Wait ‘till they find out!” he said with a hint of childhood mischievousness. 

With their hearts set on it, imagine my dismay when I found out the bank’s agent was presenting four other offers to the bank the very next day. How fortunate that my clients had just enough time to react.
“Congratulations!” the bank’s agent said only two days later. “Your offer has been accepted!” (Most real estate agents are always at their best, but I can assure you they’re at their very best when it really counts – those critical moments that arrive in every real estate transaction – like when a client is trying to save his childhood home!) 

That’s why I chose real estate – the real part of it – the sheer joy that came through my phone when I passed the good news along to my clients. The same joy I would have felt if it had been my childhood home.
In the weeks leading up to the closing, the bank allowed my clients to work on the property – minor repairs, the hayfield of a yard, abandoned junk and the like. How humbling it was to so see the joy and determination in my clients’ eyes as they began bringing their home back to life.

And for added lift, I watched the appraiser look at the sales contract, raise his eyes up towards the house, and look back at the contract with a puzzled look as if he thought he might be at the wrong address. “They got a heck of a deal.”

I picture a Christmas stocking hanging where it once spread its warmth so many years ago, bringing childhood memories back to life. Home again, defying time, just like my childhood barbecue.
Season’s Greetings and a Happy New Year from all your friends at TLC Realty.

Mortgages 2014 - By Rick Yost

Many people are unaware of the coming changes in the mortgage world. The Consumer Financial Protection Bureau has drafted new regulations that change the definition of a qualified mortgage. This new standard will apply to all mortgage applications received on and after January 10. The Consumer Financial Protection Bureau was formed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CFPB was established to protect consumers by writing rules and carrying out federal consumer financial laws. 
The CFPB considers qualified mortgages as loans that meet certain standards designed to ensure that it is highly likely that the borrower will be able to pay the loan back. That is a mouthful isn’t it? These standards for qualified mortgages are changing in 2014. The standards for qualified mortgage will be:

The APR must be within 150 basis points of the annual prime offer rate.
The loan term cannot exceed 30 years.
Points and fees cannot exceed three percent of the loan balance.
There can be not negative amortization.
There can be no interest only payments.

If a mortgage meets these standards, it is considered a safe harbor. A safe harbor loan is one that the lender cannot be sued by the borrower if the borrower is unable to repay the loan. Got that? 

All it really means is that mortgage loans must be designed to protect the consumer from borrowing money they will not be able to pay back. 

The second part of the regulations is a series of requirements that must be met by the borrower and verified by the lender. These include income and debt levels. There will be more paperwork and more checks and balances.

What is considered a qualified mortgage is a big deal to you, the consumer. Government Sponsored Enterprises (GSE) will not purchase non-qualified mortgages starting next year. That means that lenders will not be able to sell your loan to Fannie Mae, Freddie Mac, or any other GSE if it is not qualified. While some lenders do own the mortgages that they originate, most sell the mortgages to Fannie Mae, Freddie Mac, etc... Who in turn, bundle the mortgages and sell them as securities to investors. 

I know this is pretty confusing. What is important to remember is that you want a qualified mortgage in order to get the best rate available. If you are planning on getting a mortgage in 2014, you should do a few things now. Pay down your debt – create better debt ratios to qualify for a larger loan. Start the paper work now – the verification process can be time consuming, confusing and frustrating. Ask many questions – this is a confusing and difficult process, so make sure you get it right. Find a mortgage professional that is an expert and that you trust – they will help you navigate this process.

Good Luck in 2014.

Rick is a realtor, real estate author, and long-time Windham resident. Contact Rick with any of your real estate questions or needs at

Monday, December 9, 2013

For Sale by owner woes: Why it's so hard to sell your own home - By Carrie Colby

For most people, a for-sale-by-owner transaction simply isn’t in the cards. 
Granted, some people can sell their own homes without the services of a real estate agent. But the majority of these successful do-it-yourselfers are experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who’s already living in the home. These circumstances are the exception, however, not the norm. For most people, a for-sale-by-owner (FSBO) transaction simply isn’t feasible. Here are some reasons why. 

FSBOs can’t list their home in the multiple listing service (MLS). FSBOs aren’t permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. There are some agencies that will put your home in the MLS for a small fee but that is where their help ends. FSBOs are also locked out of many home search engines and Websites, including the gigantic 

Agents usually won’t show FSBO homes. In a typical home sale, the buyer’s agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there’s no guarantee that the buyer’s agent will be compensated for his or her services, unless the buyer has signed a buyer’s brokerage agreement that specifically provides for such compensation. Even if an FSBO offers to pay the buyer’s side of the commission, most agents won’t want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects. 

FSBOs usually overprice their home. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they’re wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home’s buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers.
Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they’ll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they’ll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer. 

Negotiating once an offer is received is an awkward exchange between the buyer and the FSBO owner. It is the most difficult part of the selling process and is much easier if there is a third party involved to act as the go between and to help mitigate problems with financing, repairs etcetera. 

FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, and the State of Maine has extensive disclosure requirements. An FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes. Selling a home is challenging enough. 

Don’t make it harder by trying to do it yourself.

Carrie Colby is a Realtor® the Broker/Owner of Premier Properties in Raymond she can be reached at 1263 Roosevelt Trail in Raymond.

Why list in the fall or winter? - By Dan McGowan

As the holidays approach and we head into winter, many would-be sellers will be holding off on listing their homes, waiting for the spring to put their homes on the market. But, if you’re ready to sell your home now, why wait until spring?

The inventory of homes for sale drops very dramatically as we go through the fall and stays low until well after the first of the year. What does this mean for you?  If you list now, your home will be more visible to serious buyers, who have less to choose from. Your odds of selling go up this time of year. After the first of the year there will be a flood of new listings coming on the market. That increased supply without an equal increase in demand, can cause houses to stay on the market longer.

However, there is a difference between spring buyers and fall buyers. The highest quality buyers, those ready, willing, and able to buy, are those who are out shopping in the fall. If someone is out looking at homes in the middle of November or December, then there is likely some urgency to their home purchase. There might be a newly formed or growing family, a new job, a divorce, or some other important life event which is motivating them to be out looking for a home.

Fall is a time when home buyers are getting back into a routine that allows time for a home search. Nowadays, most searches for homes are done on the Internet and when it’s cold outside, potential buyers tend to stay indoors and search for homes on their computers.

Earlier this week a report came out from the Maine Association of Realtors that states:

“Maine’s existing home sales and prices continued to move in a positive direction. According to Maine Listings, realtors across Maine’s 16 counties sold 1,246 homes in October—an increase of 5.86 percent from one year ago. The median sales price (MSP) rose 3.37 percent to $176,250.”

This is good news for homeowners wanting to sell!

 So, the bottom line is that if your home isn’t available, you may miss your perfect buyer! If you know you want to sell, don’t wait. The question really is, why delay? What’s the downside of listing now? With what’s going on in Washington lately, interest rates could go up, leaving potential buyers left out in the cold!

Open house timeline - By Rick Yost

Whether you are using a realtor or trying a “for sale by owner”, an open house can be a very effective tool in the process of selling your home. You notice that I use the term—can be. An open house should be well planned and executed. It is an opportunity to present your home in the best possible light to a large number of potential buyers. You don’t want to waste this opportunity, so start planning about four weeks in advance, execute your plan and sell your home.
 About four weeks before your open house date, make plans for your kids and pets. Call grandparents, friends, neighbors, and/or kennels. Having plans for kids and pets will leave your house clean, neat and smelling fresh on the day of your open house. It will also free you up to concentrate on last minute preparations and details. Have friends or a realtor tour your home and point out maintenance issues that you have become blind to, like scratches on the walls, running toilets, dirty doors. Then line up contractors to fix the issues or schedule the time to fix some items yourself. At this point you should also start the de-clutter process. Don’t just stuff things in the closet. Buyers will open all your closets and assess the space available in them. Store all your off season clothing items and sporting goods somewhere off premise. Make an appointment with a carpet cleaner or reserve a rug doctor for about two days before your open house. Also make an appointment with a professional cleaning company for one day before the open house. This will leave your home spic and span for the big day.

 About three weeks before the open house, continue the de-clutter process and remove all personal pictures and kids’ art work. You want the buyer to picture themselves in the home. Buy big fluffy towels for the bathrooms and fancy hand soaps. These are things you can take to your new home, but give your current bathroom spaces and upscale feel. Buy new doormats for a good first impression. Start collecting some small boxes to store personal items in on the big day.

 About two weeks before the open house, continue to de-clutter. A great time for a yard sale or Goodwill run. Rent a pressure washer and pressure wash your siding, your deck, your driveway, your sidewalk, and anything else that could use a good wash. Clean all your hard to reach spots—ceiling fans, top of cabinets, and behind furniture. Clean all your door knobs and light fixtures. A clean and shiny home makes buyer fell like your home is move in ready.

 About a week before the open house, continue to de-clutter. Make sure buyers can get a good look at your furnace, your fuse box and all appliances. They will want to see a current service sticker on your furnace and look inside appliances, make sure they are clean. Organize your kitchen cabinets and drawers. Buyers will open them and judge how much they can hold. Unorganized kitchens look like they lack storage. If you’re using a realtor, read and edit the brochure that was prepared on your home. If you are not using a realtor, create a one page flyer on your home—square footage, number of bedrooms and bathrooms, special features, heating source, taxes, etc. Make multiple copies.

 Two days before your open house, de-clutter your yard. Get all toys, hoses and pet stuff put away. Mow your lawn—mowing the day of will bother buyers with allergies. Buy ready to cook cookie dough and a bag of lemons. Lay out the new doormats that you bought. They will still look good for your open house, but won’t look like you’re trying too hard.

 One day before the open house, put up lots of open house signs where drivers can see them and point the way to your open house. Put away all counter top appliances in the kitchen and put away all throw rugs. Put up post it notes around the house pointing out key features like central AC, new appliances, electric dog fence, or an irrigation system or create a room by room list of features and make copies for buyers and leave them beside your home flyer.

 The day of the open house, drop the kids and the pets off. Put all checkbooks, bank statements, prescription drugs, jewelry, and piggybanks in a safe or in the trunk of your car. Better safe than sorry. Bake the cookie dough, brew a pot of coffee, and put the lemons in a glass bowl. Your home will smell warm and inviting. Set the dining table for a special occasion and uncover your BBQ grill. Remove all soap, shampoo, toothpaste, etc. from the bathrooms. Put them in the small boxes you got earlier and put them under the sink. Put out the new towels and fancy soaps.

 An hour before your open house, put out the cookies on a nice platter with a small sign that says—help yourself. Open all your curtains and turn on all your lights. Your house should be as bright as possible. If you are using a realtor, take advantage of no kids and pets and see a movie, go to the gym or take a nice ride. Let your realtor do their job. If you are not, greet people graciously, direct them to look around, answer any questions that you are asked, but generally stay out of the way and don’t play salesman. Let your hard work do the selling.

 Lastly—Sell your home.

Rick is a realtor, real estate author, and longtime Windham resident. You can reach Rick with any of your real estate questions at

Friday, November 15, 2013

Why should you use a realtor to buy a home - By Carrie Colby, Premier Properties

Buying a home for the first time can be overwhelming. While it may be tempting to avoid realtor fees and handle things on your own, having a professional by your side can make the process go more smoothly and provide valuable insight into what’s likely one of the biggest purchases of your life. 
There are numerous reasons to use a realtor to buy a home:

1) Access to every home that’s on the market via Multiple Listing Service (MLS) and all other sources, including ones that may not be listed publicly. Some agents have what are called “pocket“ listings that they know are going to come on the market soon or ones where the seller would be willing to sell but aren’t in a rush and don’t want the hassle of listing their home, giving you the inside track to the deals before they event hit the market.

2) The ability to combine your dream house checklist with your price range. A good real estate agent is one who understands your wants and needs without going over your price range. An ethical agent won’t steer you to homes that are out of your reach.

3) Knowledge of recent comps (comparables) — what similar properties have sold recently and for how much, which will help you once you are ready to make an offer. Your realtor has the ability and expertise to negotiate on your behalf.

4) You should hire a realtor that is knowledgeable about the area you are looking in. For instance, they should be knowledgeable about the schools, neighborhood and zoning issues.

5) Your realtor should also have a good working relationship with the other area real estate agents. There have been cases where I have contacted other agents about possible listings they might have coming on the market that might fit the needs of my buyers. Also when it comes the negotiating it is good for your realtor to be on good terms with the listing agent.

6) Your realtor should have the expertise to negotiate and close the deal. They should have a list of referrals for inspectors, mortgage brokers and even tradesman for repairs and renovations you might want to do at a later date. Your realtor must have the muscle to get a deal through the escrow or “under contract” period. They should have a good track record of getting buyers to the closing table and buying their dream home.

Buying a home is one of the most important decisions of your life. Don’t leave it up to someone who is not an expert in their field.

Carrie Colby is a Realtor® the Broker/Owner of Premier Properties in Raymond she can be reached at